Fintech companies have had a mixed earnings season. Some big hitters have smashed it (Block) while others (PayPal) have crashed and burned. Going by investors’ buoyant reaction, you can put SoFi Technologies (SOFI) in the former camp.
Shares took off in Wednesday’s session, after the company posted beats on both the top-and bottom-line, yet as has become increasingly important, also provided a robust outlook for the year.
Revenue increased by ~54% year-over-year to $279.88 million, eking out a small $0.41 million beat. Likewise, EPS of -$0.15 came in $0.01 above expectations.
Building on a trend, SOFI added 523,000 new members – a record – accelerating on Q3’s 377,000 additions, which followed Q2’s 279,000 adds. Total products also improved sequentially with 906,000 added in Q4, compared to the 600,000 added in Q3.
There was also further acceleration for SOFI’s technology platform Galileo. After adding 10 million accounts in the previous quarter, 11 million were added in Q4.
And while 1Q22’s guidance fell short of the consensus estimate, full-year 2022 revenue is anticipated to hit $1.57 billion, higher than consensus at $1.45 billion.
Looking at the display, Mizuho analyst Dan Dolev is impressed: “Results were very strong, marked by improving KPIs across the board including yet another acceleration in incremental members, a very large jump in products per member and faster growth in Galileo vs. prior quarters. FY guidance too was very upbeat and significantly ahead of expectations.”
Dolev rates SOFI stock a Buy, while his $17 average target suggests shares will climb ~45% in the year ahead. (To watch Dolev’s track record, click here)
Rosenblatt’s Sean Horgan also highlights the “strong” full-year 2022 guidance, while noting operating metrics such as Galileo accounts and total products “surprised consensus to the upside.” The analyst also points out the 1Q22 guide includes only a “nominal impact” from SoFi Bank.
Horgan keeps a Buy rating on the shares, along with a $22 price target, suggesting room for ~88% growth over the coming months. (To watch Horgan’s track record, click here)
What does the rest of the Street think? The average price target falls somewhere between these analysts’ projections; at $18.85, the figure could yield returns of ~58% by this time next year. Most are backing SOFI but not all are on board; the stock’s Moderate Buy consensus rating is based on 7 Buys vs. 4 Holds. (See SoFi stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
